Oil/Gas/Establishing Heirship Marshall Co. OK
My question is concerning mineral interest in Marshall/Bryan County OK section 9-6S-7E. Our family leased 200 acres of mineral rights to XTO Energy 2 years ago. We were recently approached by a Landman with requirements stating we would need to proceed with a Probate in the State of OK in order for XTO to release royalties that have been put in a suspense account. My grandparents and family reside in California. Our grandmother passed away 4 years ago leaving a Living Trust with all heirs listed which I did send a copy to the Landman. The Landman referred an attorney who states we would need to file a Quiet Title action. Would an Oklahoma Affidavit of Heirship recorded with Marshall/Bryan County along with the Living Trust establish necessary heirship?
It's up to the oil company as to what they'll accept in order to pay you, but in Oklahoma many (and apparently this one the landman works for) will require you to probate a decadent's estate IN Oklahoma before they'll "agree" that you actually inherited anything and release the suspended funds. A trust helps, as it's supposed to "avoid" probate in many cases, but a lot of the time oil companies (and also mineral rights buyers if you're selling) will still require the decedent's estate be probated (in Oklahoma) before they'll pay. They figure if a judge agrees with you (i.e. by signing a "Final Decree" or Order Determining Heirs" etc.) at the completion of the probate process, then that's good enough for them to begin paying you as an heir.
That said, on properties that aren't producing much income, sometimes the oil company (or someone buying your mineral rights) will be okay with just an affidavit as you suggested. Apparently not this company though. If you do nothing, they'll eventually turn the suspended funds over to the Oklahoma Secretary of State's office, where they'll sit until you prove to THEM you're the rightful heir. THEY may also require a probate be done in order to claim the money.
The landman is also correct that in some cases a "Quiet Title Suit" can also be done in lieu of an actual (ancillary) probate. Even a QT Suit is a court proceeding though, and thus also involves a judge signing off on (or "validating") a will or other heirship document such as a trust.
The only way you might get away without probating an estate is if you are a surviving "joint tenant" of a mineral interest. Once one joint tenant dies, usually all that's required to satisfy an oil company is an affidavit signed by the surviving joint tenant stating that their co-tenant has died. Often a death certificate of said co-tenant will be attached to the affidavit. This wouldn't be applicable in your situation however, since you are an heir, rather than a surviving joint tenant.
You can probably get an "ancillary" probate done in Oklahoma for between $2000 and $3000 assuming the estate being probated is not very complicated. Same with a QT Suit. I'd just make sure any attorney you use is familiar with oil and gas rights at least a little. Any 'family attorney" can do an ancillary probate, but better to find one with some oil and gas experience if you can.
Finally, you'll want to ascertain whether the property is even worth probating. If the royalty income that is being held or will be held in the future is not worth the cost of the probate then may be best just to leave it undone for now. You can always do it later, and in Oklahoma I believe that after ten years the affidavit method you suggested would suffice legally as long as no one contests it during that time. In other words, if you just filed an affidavit and perhaps added the trust as an addendum to it today, rather than bothering with a probate or quiet title suit, then in 10 years you'd have "good title" and wouldn't need to worry abot probating anything because under Oklahoma law after ten years an affidavit will suffice to convey property that is inherited as long as the affidavit is not contested within that time. Check with an attorney on this to be sure but I think that's the case.
If you don't want to wait ten years, then best to determine whether this interest is worth enough to cover the probate or quiet title costs necessary to free the income from suspense.
Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub